Information Advantage

June 11th, 2013 - How technology is improving the supply chain

As companies increasingly trade with multiple partners around the world they are seeking more efficient, cost-effective and flexible supply-chain solutions.

For many, technology can vastly improve their operations, says Frédéric Serra, business solutions and supply chain manager in the technology department of SDV in Paris.

“Successful management of information is becoming critical to the supply chain,” Serra says.

“It allows companies to reduce costs by consolidating flows and makes them more reactive and analytical.”

From the more established services such as tracking, reporting and warehouse management to the provision of key performance indicators and electronic exchanges, logistics and transportation providers are offering broader technological solutions to boost the supply chain.

For example, SDV tracks more than 800 shipments a month for a large aeronautical group, offering reactivity and decision-making 24 hours a day for critical spare parts. It combines real-time information from operations, carriers and local customs departments.

Reporting provides companies with customized analytical information through a consolidated view of their supply-chain activities while measuring the performance of parties involved. It also offers exception management for large activities as well as process controls for complex activities, allowing for better planning and reactivity.

Order management, where the freight forwarder more deeply integrates its client’s supply chain, is another high-growth area. By using their worldwide network and proximity to vendors, providers can ensure the quantity, quality and timeliness of their clients’ purchase orders while offering cost savings through consolidation. Over the past three years, SDV, for example, has developed order management and consolidation platforms for some of the world’s largest groups in industries ranging from textiles to luxury goods and oil and gas. These platforms span purchasing and supply policies, such as the choice of incoterms, and processes with vendors.

Interfacing, meanwhile, allows clients to integrate logistics and transportation providers’ systems into their own computer networks so speeding up the exchange of information and reducing data entry as well as the potential for errors. “We can receive booking instructions and purchase orders and send back the status of shipments using international electronic data interchange standards or the client’s own format,” notes Serra.

Integrated systems are proving especially popular. SDV expects to have around 100 integrated clients by the end of this year compared to just eight back in 2007.

In the future, Serra expects logistics and transportation providers to further integrate the supply chain by assuming responsibility for entire logistics systems and making decisions on behalf of their clients. These decisions, based on instructions received electronically combined with consolidated data, can also include optimized scenarios that include real-time constraints. For example, the tool could decide to ship goods by air instead of sea taking into account the cost and time of transport.

Serra thinks the role of freight forwarders could eventually evolve to full control of the logistics budget with specific targets to reduce costs, noting that SDV is talking to one aeronautical client about offering such a service. “Clients want freight forwarders to use technological tools to identify and react to problems on their behalf,” he says. SDV expects to have its own global decision-making tools online by the end of next year.

“Complete integration is the way forward for large clients,” Serra adds. “Technology allows us to manage the complexity of the supply chain as well as the decision-making process.”

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